No to risk aversion!
13.02.2020, 13:03

No to risk aversion!

Yesterday, once again, it was possible to observe the main world indices reaching historic highs. The basis of this event was the decrease in fears of the coronavirus spread. After the news of two days ago, in which the Chinese medical authorities reported that in April the virus spread would be controlled, brought confidence to investors.

More specifically in Europe, the main European index - Stoxx 600 - ended up valuing 0.63%. European debt interest rates have had a mixed behavior. Perspectives of a recession revealed by Deutsche Bank regarding the German economy led to an increase of most European yields, while bonds of Portugal, Greece and Italy were the exception.

With this, the euro ended up depreciating in comparison to the American currency.

With regard to the pound sterling, it is possible to observe the continuous correction of the last days when the euro lost strength against this currency as well. The bad news regarding the German economy as well as the natural correction of a pound which is considered by analysts to be "undervalued", contributed to this gain of the British currency.

Crude, on the other hand, had a day of recovery where it was possible to observe a strong rise. However, there were two reports that, following an economic rationale, would put pressure on a price drop. One of them was the increase in crude inventories, which, under normal conditions, would lead to a drop in price due to lower demand. The other was the release of OPEC forecast which pointed a reduction in demand for the first quarter of this year. However, the positive feeling was already too strong and was not affected by this news.

Regarding gold, as it is normal on a day of greater appetite for risk, it fell during part of the day of yesterday. Further, it ended up not breaking the existing support zone near $1,560 an ounce and for that reason it has corrected again.


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  • Name: Frederico Aragao Morais
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